Australian wine exports are in decline and the industry is not well while the best wines ever made are those being made now.
Exports peaked back in 2007 meaning the perception overseas must be low. At least local consumers are happy. Even so sales patterns in Australia have been reconfigured. The large supermarket chains have expanded own brand sales and may even make wines. This further diverts revenue from wineries that need the chains for profitable sales.
In any case Australia is a small market while an industry of the current size needs growing exports.
The economist Barry Hughes equated strong exports with a low exchange rate and a strengthening currency may well have killed off the sales growth that built to 2007, with the US exchange rate peaking in 2012. Since then we have had 10 years of a low-rate hovering around 70 cents to the US$ so that argument needs rethinking.
What then holds back exports? Not quality, not the exchange rate but something else.
New Zealand exports are strong and goodness me could eclipse Australia in a few years.
Something is seriously wrong. Does anyone have any ideas?
Note: I have taken China out of this discussion.
